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Author Message
Manager
Joined: 22 Apr 2013
Posts: 95
Location: India
Concentration: Finance
GMAT 1: 660 Q48 V33
Followers: 0

Kudos [?]: 60 [0], given: 32

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23 Sep 2013, 22:36
“On average, middle-aged consumers devote 39 percent of their retail expenditure to department store products and
services, while for younger consumers the average is only 25 percent. Since the number of middle-aged people will
increase dramatically within the next decade, department stores can expect retail sales to increase significantly
during that period. Furthermore, to take advantage of the trend, these stores should begin to replace some of those
products intended to attract the younger consumer with products intended to attract the middle-aged consumer.”

Discuss how well reasoned . . . etc.

The author of this argument claims that department stores should replace some of the products that attract younger consumers with products that attract middle-aged consumers. This claim is based on the facts that middle-aged consumers devote a greater percentage of their retail expenditure to department stores than younger consumers do. Also the number of middle-aged consumers is likely to increase in the next decade, department stores expect their retail sales to increase. However on a deeper analysis, it is evident that there are certain relevant aspects that have not been taken into account, leading to a number of mistaken assumptions and logical flaws.

One such flaw is that the author mistakenly assumes that a greater percentage of retail expenditure necessarily means a greater amount of money spent on department store products. If the retail expenditure of younger consumers is greater than that of middle-aged consumers, perhaps younger consumers will spend more on department store products even though their percentage ratio is lower. For example, if younger consumers spend $500 on retail expenditure, then they would spend$125 on department store products, whereas if middle-aged consumers spend &100 on retail expenditure, then they would spend \$39 on department store products. In order to strengthen the argument, the author should provide the amount of retail expenditure spent by middle-aged consumers and younger consumers.

Another statement, significantly weakening the argument is that the author assumes that an increase in the population of middle-aged people will lead to an increase in retail sales. This is a general statement provided by the author without providing further statistics to hold this argument valid. There are many factors than lead to an increase in sales such as quality of the products, customer service, less competition in the area. For example, if the middle aged population increase but at the same time the number of department stores also increase significantly, then because of increased competition the retail sales of the department stores will decrease. To overcome this flaw, the author should analyse the factors that would lead to an increase in retail sales.

The author also wrongly concludes that by replacing the products that attract younger consumers with products that attract middle-aged consumers, the department stores will increase their profits. The argument does not take into account that products that attract younger consumers perhaps bring a greater percentage of revenue for the department stores than the products that attract middle aged consumers. To make this argument more valid, the author should compare the products based on how they are selling and not based on the consumers they attract.

After closer examination of the passage presented, it is apparent that there are several logical flaws in the author's attempt to show that department stores should replace the products that attract the younger consumer with products that attract the middle-aged consumer. The recommendations in the essay show how the argument may be strengthened and logically sound.
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